Rent to Own

Homes For Low-Income Residents

If you receive government assistance or rental assistance in your state, you may be interested in purchasing a home through the rent to own method. Rent to own programs provide low-income residents with the ability to use their rental payments towards eventually purchasing the home that they are renting. Rent to own homes provide low-income families with the rare opportunity of slowly paying to own a home of their own without needing to qualify for a loan of any kind. The rent for rental homes is also usually very affordable and still counts towards the overall purchasing price of the home. If you think you are ready to try and own a home of your own through the rent to own program, continue reading the sections below to gain helpful information.

Additional Resources Low Income Home Buyer

Why rent to own?

Rent to own homes give low-income individuals the opportunity to purchase a home of their own that they would not normally be able to afford. When tenants rent to own, they are able to reduce the purchase price of the home by allotting a portion of their monthly rent towards the purchase price of the home. By slowly building up funds in this way, renters may eventually be able to accumulate a suitable amount to purchase the home and finalize a deal with the seller. In addition to the portion of the rent that goes towards the full price of the home, renters can be building up their savings accounts to be able to purchase the home sooner. Another great advantage to renting towards ownership is that renters can eventually purchase a home even with bad credit. Low-income households often do not meet the credit requirements to take on a substantial home loan and are denied the opportunity to purchase a home because of it. With rent to own programs, renters are allowed the time to save their own assets to purchase a home without having to worry about qualifying for a loan or having the home they wish to purchase go off the market.

Rent to own homes also allow potential, low-income homeowners to test out the home that they are interested in before investing all of their time and savings into purchasing it. Renters can test if the home is the right fit for their family and if it accommodates all of the needs of their individual household members. For example, renters can see if the home is a suitable distance from their job and if the commute to work is manageable. Individuals may also test if the home is a good distance from their school or the schools that their children attend. If a renter’s child walks home from school, it would be wise to ensure that the neighborhood the home is located in is safe to walk through and that the distance is not too daunting for the child. It is beneficial to use the rental period as a trial run to determine if the rental home is worth the eventual investment.

Additional Resources Rent to Own Homes

Home ownership programs for renters provide low-income individuals with an opportunity that not many other programs can provide. Standard public and private housing programs under the U.S. Department of Housing and Urban Development (HUD) only offer temporary housing and rental assistance options, and usually do not give residents the opportunity to own a home of their own. Similarly, Section 8 Housing is only able to relocate individuals and their families into affordable housing communities rather than neighborhoods that the tenant prefers. These housing programs can be incredibly beneficial for low-income families as they offer needy families with a secure place to live, but they do not offer the same freedom of owning your own home.

Additional Resources Section 8

How do I find rent to own listings?

Some HUB agencies may be able to direct you to affordable homes in your area. If you are already a part of a rental assistance program run by the state or federal government, you may ask your local housing contact for information on rent to own homes and if you qualify. For some families, even rent to own programs may be too strenuous on their limited income, so make sure that your household can take on the financial burden before you choose an applicable home. Housing assistance funding may be used to pay rent on some rent to own homes, but it will depend on the seller, your financial need and the specific circumstances. Be sure to ask your local housing finance office about potential rent assistance programs that may be able to help you afford a home as you gather the necessary funds to eventually purchase it. If you wish to explore listings on your own, there are also many helpful websites available that specialize in rent to own listings.

Additional Information

When taking on your own search, you should make sure to only use sites that you can verify. You can search the Better Business Bureau for any negative reviews about the site before you decide to use it for your rent to own search. Once you find a source to search homes in your area, you should contact each owner to discuss their terms. Some owners want to sign a contract that specifies the total cost of the home upfront, while others prefer to wait until the lease expires to decide on the price of the home. Agreeing beforehand on the price is the best option for you because the value of the home can change drastically over the course of your lease. You can filter your search for a property based on property owners open to agreeing on a set price so that you can get the best value for your money. Be sure to investigate property values in your area to determine what you can expect when negotiating the purchasing price.

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